<PAGE>

                              EMPLOYMENT  AGREEMENT

         THIS AGREEMENT between Arcadia Financial Ltd. (the "Company") and
Duane E. White (the "Executive") is dated as of this 1st day of May, 1997.


                               W I T N E S S E T H:

         WHEREAS, the Company and the Executive have agreed to enter into
an agreement providing the Company and the Executive with certain rights to
assure the Company of continuity of management;

         NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is hereby agreed by and between the Company
and the Executive as follows:

         1.  EFFECTIVE DATE; TERM. This Agreement shall govern the terms
and conditions of Executive's employment commencing as of the date hereof
(the "Effective Date").

         2.  PRIOR EMPLOYMENT AGREEMENT. Not applicable.

         3.  RETENTION PERIOD. The Company agrees to employ the Executive,
and the Executive agrees to remain in the employ of the Company, for the
period (the "Retention Period") commencing on the Effective Date and ending
on the date of any termination of the Executive's employment in accordance
with Section 6 of this Agreement.

         4.  POSITION AND DUTIES. (a) POSITION. During the Retention
Period, Executive shall serve as Executive Vice President of Corporate
Services and shall report to the President and Chief Executive Officer.

            (b) BUSINESS TIME. During the Retention Period, the Executive
shall devote his full business time during normal business hours to the
business and affairs of the Company and use his best efforts to perform
faithfully and efficiently the responsibilities assigned to him hereunder,
to the extent necessary to discharge such responsibilities, except for

               (i) reasonable time spent in serving on corporate, civic or
    charitable boards or committees of the nature similar to those on
    which the Executive served prior to becoming employed hereunder, or
    otherwise approved by the Board, in each case only if and to the
    extent not substantially interfering with the performance of such
    responsibilities, and

              (ii) periods of vacation and sick leave to which he is
    entitled.

It is expressly understood and agreed that the Executive's continuing to
serve on any boards and committees on which he is serving or with which he
is otherwise associated immediately preceding the


<PAGE>

Effective Date (including but not limited to the Board of Career College
Loan Company) shall not be deemed to interfere with the performance of the
Executive's services to the Company. Further, the Executive's performance
of duties for Career College Loan Company in any capacity shall be
permitted so long as the performance of such duties does not unreasonably
interfere with his performance of his duties hereunder.

         5.  COMPENSATION AND BENEFITS. (a) BASE SALARY. During the
Retention Period, the Executive shall receive a base salary ("Base Salary")
at an annual rate of $250,000 paid in accordance with the Company's regular
payroll practices. The Base Salary shall be reviewed at least once each
year after the Effective Date, and may be increased (but not decreased) at
any time and from time to time by action of the Board or any committee
thereof or any individual having authority to take such action in
accordance with the Company's regular practices. Neither payment of the
Base Salary nor payment of any increased Base Salary after the Effective
Date shall serve to limit or reduce any other obligation of the Company
hereunder. For purposes of the remaining provisions of this Agreement, the
term "Base Salary" shall mean Base Salary as defined in this Section 5(a)
or, if increased after the Effective Date, the Base Salary as so increased.

         (b)  ANNUAL BONUS. In addition to the Base Salary, the Executive
shall be awarded for each fiscal year of the Company ending during the
Retention Period an annual bonus, to be based on reasonable and customary
criteria consistent with the Company's past practices (the "Annual Bonus"),
with a target amount at least equal to 40% of his Base Salary (I.E., that
percentage of the Executive's Base Salary designated by the Company's
Compensation Committee for purposes of Section 4.1 of the Company's
1998-2000 Restricted Stock Election Plan). If a fiscal year of the Company
begins, but does not end, during the Retention Period, the Executive shall
receive an amount with respect to such fiscal year at least equal to the
amount of the Annual Bonus multiplied by a fraction, the numerator of which
is the number of days in such fiscal year occurring during the Retention
Period and the denominator of which is 365. Each amount payable in respect
of the Executive's Annual Bonus shall be paid not later than 90 days after
the commencement of the fiscal year next following the fiscal year for
which the Annual Bonus (or pro-rated portion) is earned or awarded. Neither
the Annual Bonus nor any bonus amount paid in excess thereof after the
Effective Date shall serve to limit or reduce any other obligation of the
Company hereunder.

         (c)  FRINGE BENEFITS. During the Retention Period, the Company
shall provide the following fringe benefits to Executive:

              (i) HEALTH, DISABILITY AND LIFE INSURANCE. Subject to
    satisfaction of the eligibility requirements of such plans and the
    rules and regulations applicable thereto, Executive and his family
    members shall be entitled to be covered by the Company's group health
    and dental insurance plans presently in effect or hereafter adopted by
    the Company and applicable to employees of the Company generally and
    Executive shall be entitled to be covered by the Company's group
    disability and life insurance plans presently in effect or hereafter
    adopted by the Company and applicable to the employees of the Company
    in general. The Company shall pay the premiums associated with such
    coverage. In the event Executive makes a claim against any disability
    policy provided to Executive by the Company pursuant to this Section
    5(c)(i) and


                                        2
<PAGE>

    such policy calls for a waiting period which is applicable to Executive's
    claim, the Company shall pay to Executive during such waiting period his
    monthly base salary due during such period and shall provide the other
    benefits due him under this Section 5(c)(i).

              (ii)    VACATION. During the first year of the term hereof, the
    Executive shall be entitled to three weeks paid vacation the first year
    of employment. Each year thereafter, the Executive shall be entitled to
    four weeks of vacation. Such vacation shall be without loss of
    compensation or other benefits pursuant to such general policies and
    procedures of the Company as are from time to time adopted by the
    Company.

              (iii)   EXPENSE REIMBURSEMENT. Executive shall be reimbursed by
    the Company for all reasonable expenses incurred by him in connection
    with the conduct of the Company's business for which he furnishes
    appropriate documentation.

              (iv)    AUTOMOBILE. The Company shall pay to Executive a monthly
    auto expense allowance in the amount of not less than Four Hundred
    Dollars ($400) per month.

              (v)     STOCK OPTION. The Company shall on the Effective Date
    grant to the Executive an incentive stock option to purchase up to
    100,000 shares of Common Stock of the Company at a price per share equal
    to the fair market value of the stock on such date subject to the terms
    of an incentive stock option agreement to be agreed upon by the parties.

         6.  TERMINATION. (a) DEATH OR DISABILITY. The Executive's employment
shall terminate automatically upon his death. The Company may terminate
Executive's employment during the Retention Period, after having established
the Executive's Disability, by giving the Executive written notice of its
intention to terminate his employment, and his employment with the Company
shall terminate effective on the 90th day after receipt of such notice if,
within 90 days after such receipt, the Executive shall fail to return to
full-time performance of his duties. For purposes of this Agreement,
"Disability" means disability which, after the expiration of more than 26
weeks after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the
Executive or his legal representatives (such agreement to acceptability not to
be withheld unreasonably).

         (b)  VOLUNTARY TERMINATION. Notwithstanding anything in this
Agreement to the contrary, the Executive may, upon not less than 15 days'
advance written notice to the Company, voluntarily terminate employment during
the Retention Period for any reason, provided that any termination by the
Executive pursuant to Section 6(d) of this Agreement on account of Good Reason
(as defined therein) shall not be treated as a voluntary termination under
this Section 6(b).

         (c)  CAUSE. The Company may terminate the Executive's employment
during the Retention Period for Cause. For purposes of this Agreement, "Cause"
means (i) gross misconduct on the Executive's part which is demonstrably
willful and deliberate and which results in material damage to the Company's
business or reputation or (ii) repeated material violations by the Executive
of his obligations under Section 4 of this Agreement which violations are
demonstrably willful and deliberate.


                                          3
<PAGE>

         (d)  GOOD REASON. The Executive may terminate his employment during
the Retention Period for Good Reason. For purposes of this Agreement, "Good
Reason" means

              (i)     a good faith determination by the Executive that,
without his prior written consent, the Company or any of its officers has
taken or failed to take any action (including, without limitation, (A)
exclusion of the Executive from consideration of material matters within his
area of responsibility, other than an insubstantial or inadvertent exclusion
remedied by the Company promptly after receipt of notice thereof from the
Executive, (B) statements or actions which undermine the Executive's authority
with respect to persons under his supervision or reduce his standing with his
peers, other than an insubstantial or inadvertent statement or action which is
remedied by the Company promptly after receipt of the notice thereof from the
Executive, (C) a pattern of discrimination against or harassment of the
Executive or persons under his supervision and (D) the subjection of the
Executive to procedures not generally applicable to other similarly situated
executives) which changes the Executive's position (including titles),
authority or responsibilities under Section 4 of this Agreement or reduces the
Executive's ability to carry out his duties and responsibilities under Section
4 of this Agreement;

              (ii)    any failure by the Company to comply with any of the
provisions of Section 5 of this Agreement, other than an insubstantial or
inadvertent failure remedied by the Company promptly after receipt of notice
thereof from the Executive;

              (iii)   any failure by the Company to obtain the assumption of
and agreement to perform this Agreement by a successor as contemplated by
Section 13(b) of this Agreement; or

              (iv)    during the period from May 1, 1998 to July 31, 1998, a
determination by the Executive in his sole discretion that his scope of
responsibilities are not acceptable to him.

         (e)  WITHOUT CAUSE. The Company shall give Executive at least 15
days' advance written notice of any termination of Executive's employment
which is not for Cause and not on account of Executive's Disability.

         (f)  NOTICE OF TERMINATION. Any termination of Executive's
employment by the Company for Cause or by the Executive for Good Reason during
the Retention Period shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 14(c) of this
Agreement. For purposes of this Agreement, a "Notice of Termination" means a
written notice given, in the case of a termination by the Company for Cause,
within 10 business days of the Company's having actual knowledge of all of the
events giving rise to such termination, and in the case of a termination by
Executive for Good Reason, within 180 days of the Executive's having actual
knowledge of the events giving rise to such termination (except as to Good
Reason based upon Subsection 6(d)(iv), in which case such notice must be given
prior to August 1, 1998), and which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated, and (iii) specifies
such termination date (which date shall be not more than 15 days after the
giving of such notice). The failure by the Executive to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing
of Good Reason shall not waive


                                          4
<PAGE>

any right of the Executive hereunder or preclude the Executive from asserting
such fact or circumstance in enforcing his rights hereunder.

         (g)  DATE OF TERMINATION. For purposes of this Agreement, the term
"Date of Termination" means (i) in the case of a termination for which a
Notice of Termination is required, the date of receipt of such Notice of
Termination or, if later, the date specified therein and (ii) in all other
cases, the actual date on which the Executive's employment terminates during
the Retention Period.

         7.   OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) DEATH. If the
Executive's employment is terminated during the Retention Period by reason of
the Executive's death, this Agreement shall terminate without further
obligations to the Executive's legal representatives under this Agreement
other than those obligations accrued hereunder at the date of his death,
including, for this purpose (i) the Executive's full Base Salary through the
Date of Termination, (ii) the product of the Annual Bonus and a fraction, the
numerator of which is the number of days in the current fiscal year of the
Company through the Date of Termination, and the denominator of which is 365
(the "Pro-rated Bonus Obligation"), (iii) any compensation previously deferred
by the Executive (together with any accrued earnings thereon) and not yet paid
by the Company, (iv) any other amounts or benefits owing to the Executive
under any of the Company's incentive compensation plans, stock option plans,
restricted stock plans or other similar plans and (v) any amounts or benefits
owing to the Executive under any of the Company's employee benefit plans or
policies (such amounts specified in clauses (i), (ii), (iii), (iv) and (v) are
hereinafter referred to as "Accrued Obligations"). Unless otherwise directed
by the Executive prior to his death, all Accrued Obligations shall be paid to
the Executive's estate.

         (b)  DISABILITY. If the Executive's employment is terminated by
reason of the Executive's Disability, the Executive shall receive all Accrued
Obligations and, in addition, from the Date of Termination until the second
anniversary of such date, shall continue to participate in or be covered under
the benefit plans and programs referred to in Section 5(c)(i) of this
Agreement or, at the Company's option, to receive equivalent benefits by
alternate means at least equal to those provided in accordance with Section
5(c)(i) of this Agreement. Anything in this Agreement to the contrary
notwithstanding, the Executive shall be entitled to receive disability and
other benefits at least equal to the most favorable level of benefits
available to disabled employees and/or their families in accordance with the
plans, programs and policies maintained by the Company or its affiliates
relating to disability at any time during the 90-day period immediately
preceding the Effective Date.

         (c)  CAUSE AND VOLUNTARY TERMINATION. If, during the Retention
Period, the Executive's employment shall be terminated for Cause or
voluntarily terminated by the Executive (other than on account of Good
Reason), the Executive shall receive all Accrued Obligations other than the
Pro-rated Bonus Obligation.

         (d)  TERMINATION BY COMPANY OTHER THAN FOR CAUSE OR DISABILITY AND
TERMINATION BY EXECUTIVE FOR GOOD REASON. LUMP SUM PAYMENT. If, during the
Retention Period, the Company terminates the Executive's employment other than
for Cause or Disability, or the Executive terminates his employment for Good
Reason (other than Good Reason pursuant to Section 5(d)(iv)), the Executive
shall receive all Accrued Obligations, and in addition, the Company shall pay
to the Executive in a lump


                                          5
<PAGE>

sum, within 15 days after the Date of Termination, a cash amount equal to two
times the sum of the following amounts:

              (1)     the Executive's annual Base Salary at the rate specified
         in Section 5(a) of this Agreement;

              (2)     the Annual Bonus;

              (3)     an amount equal to the average annual amount payable to
         the Executive pursuant to Section 5(c)(iv) hereof during one
         calendar year of the Retention Period; and

              (4)     the present value, calculated using the annual federal
         short-term rate as determined under Section 1274(d) of the Code, of
         (without duplication) the annual cost to the Company (based on the
         premium rates or other costs to it) of obtaining coverage equivalent
         to the coverage under the plans and programs described in Section
         5(c)(i) of this Agreement;

    provided, however, that with respect to the life and medical insurance
    coverage referred to in Section 5(c)(i) of this Agreement, at the
    Executive's election made prior to the Date of Termination, the Company
    shall use its best efforts to secure conversion coverage and shall pay
    the cost of such coverage in lieu of paying the lump sum amount
    attributable to such life or medical insurance coverage.

If such termination occurs due to the Executive's termination hereof for Good
Reason pursuant to Section 5(d)(iv) hereof, the Executive shall receive all
Accrued Obligation, and in addition, the Company shall pay to the Executive in
a lump sum, within 15 days after the Date of Termination, a cash amount equal
to the sum of items (1) through (4) set forth in this subsection 7(d).

         8.   NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company or
any of its affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise prejudice such rights as the
Executive may have with respect to awards granted to him prior to or during
the Retention Period under any stock option, restricted stock or other plans
or agreements with the Company or any of its affiliated companies. Amounts
which are vested benefits or which the Executive is otherwise entitled to
receive under any plan or program of the Company or any of its affiliated
companies shall be payable in accordance with such plan or program.

         9.   CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

         (a)  Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment, distribution, acceleration
of vesting or other benefit which the Executive receives or becomes entitled
to receive, whether alone or in combination, and whether pursuant to the terms
of this Agreement or any other agreement, plan or arrangement with the Company
or any of its affiliates or any of their respective successors or assigns, but
determined without regard to any additional payments required under this
Section 9 (collectively, the "Payments"), would be subject


                                          6
<PAGE>

to the excise tax imposed by Section 4999 of the Code (or any successor
provision), or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the "Excise Tax"),
then the Executive shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the Executive of
(i) all taxes with respect to the Gross-Up Payment (including any interest or
penalties imposed with respect to such taxes) including, without limitation,
any income taxes (and any interest and penalties imposed with respect
thereto), and (ii) the Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed on the Payments.

         (b)  Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determination, shall be
made by KPMG Peat Marwick or such other nationally recognized accounting firm
then auditing the accounts of the Company (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and the Executive
within 15 business days of the receipt of notice from the Executive that there
has been a Payment, or such earlier time as is requested by the Company. In
the event that the Accounting Firm is unwilling or unable to perform its
obligations pursuant to this Section 9, the Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, determined pursuant to this
Section 9, shall be paid by the Company to the Executive within five days of
the receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a
result of the potential uncertainty in the application of Section 4999 of the
Code (or any successor provision) at the time of the initial determination by
the Accounting Firm hereunder, it is possible that Gross-Up Payments which
will not have been made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to Section 9(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to or
for the benefit of the Executive.

         (c)  The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than 20 business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes with respect
to such claim is due). If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to contest such claim, the
Executive shall:

         (i)  give the Company any information reasonably requested by the
              Company relating to such claim,


                                          7
<PAGE>

        (ii)  take such action in connection with contesting such claim as
              the Company shall reasonably request in writing from time to
              time, including, without limitation, accepting legal
              representation with respect to such claim by an attorney
              reasonably selected by the Company,

       (iii)  cooperate with the Company in good faith in order effectively
              to contest such claim, and

        (iv)  permit the Company to participate in any proceedings relating
              to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limiting the foregoing provisions of
this Section 9(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest
the claim in any permissible manner, and the Executive agrees to prosecute
such contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts, as the Company
shall determine; provided, however, that if the Company directs the Executive
to pay such claim and sue for a refund, the Company shall advance the amount
of such payment to the Executive, on an interest-free basis, and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension
of the statute of limitations relating to payment of taxes for the taxable
year of the Executive with respect to which such contested amount is claimed
to be due is limited solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.

         (d)  If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Company's complying with the requirements of Section 9(c)) promptly
pay to the Company the amount of such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If, after the receipt by
the Executive of an amount advanced by the Company pursuant to Section
9(c), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to
the expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required
to be paid.

         10.  FULL SETTLEMENT. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any


                                          8
<PAGE>

circumstances, including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Company may have against the
Executive or others whether by reason of the subsequent employment of the
Executive or otherwise. In no event shall the Executive be obligated to seek
other employment by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement, and no amount payable under
this Agreement shall be reduced on account of any compensation received by the
Executive from other employment. In the event that the Executive shall in good
faith give a Notice of Termination for Good Reason and it shall thereafter be
determined by mutual consent of the Executive and the Company or by a tribunal
having jurisdiction over the matter that Good Reason did not exist, the
employment of the Executive shall, unless the Company and the Executive shall
otherwise mutually agree, be deemed to have terminated, at the date of giving
such purported Notice of Termination. Such termination shall be deemed to have
been by mutual consent of the Company and the Executive.

         11.  DISPUTES; LEGAL FEES AND EXPENSES. (a) Any dispute or
controversy arising under or in connection with this Agreement shall be
settled exclusively and finally by expedited arbitration, conducted before a
single arbitrator in Minneapolis, Minnesota, in accordance with the rules
governing employment disputes then in effect of the American Arbitration
Association. The arbitrator shall be approved by both the Company and the
Executive. Judgment may be entered on the arbitrator's award in any court
having jurisdiction.

         (b)  In the event that any claim by the Executive under this
Agreement is disputed, the Company shall pay all reasonable legal fees and
expenses incurred by the Executive in pursuing such claim, provided that the
Executive is successful as to at least part of the disputed claim by reason of
arbitration, settlement or otherwise.

         12.  CONFIDENTIAL INFORMATION; NONCOMPETITION. (a) The Executive
shall hold in a fiduciary capacity for the benefit of the Company all secret
or confidential information, knowledge or data relating to the Company or any
of its affiliated companies, and their respective businesses, (i) obtained by
the Executive during his employment by the Company or any of its affiliated
companies and (ii) not otherwise public knowledge (other than by reason of an
unauthorized act by the Executive). After termination of the Executive's
employment with the Company, the Executive shall not, without the prior
written consent of the Company, unless compelled pursuant to an order of a
court or other body having jurisdiction over such matter, communicate or
divulge any such information, knowledge or data to anyone other than the
Company and those designated by it.

         (b)  It is mutually acknowledged that by virtue of Employee's
positions with the Company and its subsidiaries, he will become possessed of
certain valuable and confidential information concerning the customers,
business methods, procedures and techniques of the Company and its
subsidiaries. It is further understood that Employee will develop contacts
among the customers of the Company and its subsidiaries, and it is mutually
understood and agreed that the customers of the Company and its subsidiaries
and the business methods and procedures and techniques developed by the
Company and its subsidiaries are valuable assets and properties of the Company
and its subsidiaries. Without limitation, it is also specifically acknowledged
that great trust on the part of the Company and its subsidiaries has resided
in Employee, since Employee's former duties will include involvement in the
management, promotion and development of the Company's business. Accordingly,
the parties deem it


                                          9
<PAGE>

necessary to enter into the protective covenants set forth below, the terms
and conditions of which have been negotiated by and between the parties
hereto:

              (i) Employee agrees that during the Retention Period and until
the first anniversary of the Date of Termination, he will not, directly or
indirectly, on his own behalf or on the behalf of any third party, perform
management, accounting, financial, marketing, sales, administrative or
executive duties, in any business conducted within the Territories (as defined
below) whose primary business consists of originating or purchasing automobile
or truck loans or leases from automobile or truck dealers, packaging such
loans or leases, reselling such loans or leases or servicing such loans or
leases (the "Restricted Activities") or for any subdivision or department of
any business whose primary business does not consist of Restricted Activities,
but where the primary business of such subdivision or department consists of
Restricted Activities. As used in this Addendum, the term "Territories" means
any state in which any loans or leases originated or acquired by the Company
originated (determined by the location of the dealers from whom the loans or
leases were purchased or, in the case of loans or leases originated by the
Company, where the borrower or lessee resides).

             (ii) Employee agrees that during the Retention Period and until
the first anniversary of the Date of Termination, he will not, directly or
indirectly, solicit, divert, take away or attempt to solicit, divert, or take
away from the Company, or any subsidiary, any of the dealers and other sources
from which the Company or any subsidiary acquires loans or leases or from whom
the loan or lease packages are received by the Company or any subsidiary.

            (iii) Employee agrees that during the Retention Period and until
the first anniversary of the Date of Termination, he will not, directly or
indirectly, on his own behalf or in the service or on behalf of others,
solicit, divert or hire away, or in any manner attempt to solicit, divert or
hire away any person employed by the Company or any subsidiary, whether or not
such employee is a full-time employee or a temporary employee of the Company
or any subsidiary, and whether or not such employment was pursuant to a
written or oral contract of employment and whether or not such employment was
for a determined period or was at will.

         (c)  Employee acknowledges that the provisions of this Section 12
constitute a material inducement to the Company to enter into the Agreement.
Employee further acknowledges that the Company's remedy at law for a breach by
him of the provisions of this Section 12 will be inadequate. Accordingly, in
the event of a breach or threatened breach by Employee of any provision of
this Section 12, the Company will be entitled to injunctive relief in addition
to any other remedy it may have. If any of the provisions of, or covenants
contained in, this Section 12 are hereafter construed to be invalid or
unenforceable in any jurisdiction, the same will not affect the remainder of
the provisions or the enforceability thereof in any other jurisdiction, which
will be given full effect, without regard to the invalidity or
unenforceability in such other jurisdiction. If any of the provisions of, or
covenants contained in, this Section 12 are held to be unenforceable in any
jurisdiction because of the duration or geographical scope thereof, the
parties agree that the court making such determination will have the power to
reduce the duration or geographical scope of such provision or covenant and,
in its reduced form, such provision or covenant will be enforceable; provided,
however, that the determination of such court will not affect the
enforceability of this Section 12 in any other jurisdiction.


                                         10
<PAGE>

         (d)  In no event shall an asserted violation of the provisions of
this Section 12 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement or under any other
agreement, plan or arrangement.

         13.  SUCCESSORS. (a) This Agreement is personal to the Executive
and, without the prior written consent of the Company, shall not be assignable
by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal representatives.

         (b)  This Agreement shall inure to the benefit of and be binding
upon the Company and its successors. The Company shall require any successor
to all or substantially all of the business and/or assets of the Company,
whether direct or indirect, by purchase, merger, consolidation, acquisition of
stock, or otherwise, by an agreement in form and substance satisfactory to the
Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent as the Company would be required to perform if
no such succession had taken place.

         14.  MISCELLANEOUS. (a) APPLICABLE LAW. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Minnesota, applied without reference to principles of conflict of laws.

         (b)  AMENDMENTS. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

         (c)  NOTICES. All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

    If to the Executive:               Duane E. White
                                       707 Kenwood Parkway
                                       Minneapolis, Minnesota 55403

    If to the Company:                 Arcadia Financial Ltd. 
                                       7825 Washington Avenue South
                                       Minneapolis, MN 55439

                                       Attention: Chief Executive Officer
                                       (with a copy to the attention of the
                                       General Counsel)

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.


                                         11
<PAGE>

         (d)  TAX WITHHOLDING. The Company may withhold from any amounts
payable under this Agreement such Federal, State or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

         (e)  SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.

         (f)  CAPTIONS. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.

         IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Company has caused this Agreement to be executed in its name on its behalf,
all as of the day and year first above written.

                             ARCADIA FINANCIAL LTD.


                             By: /s/ Richard A. Greenawalt
                                ----------------------------------
                             Name: Richard A. Greenawalt
                             Title: President and Chief Executive Officer


                             /s/ Duane E. White
                             -------------------------------------
                             Duane E. White


                                         12